Partnership to Revitalize Air Cargo

By Patrick Burnson, Executive Editor
November 21, 2013 - SCMR Editorial

The International Air Transport Association (IATA) recently called on all participants in the air cargo value chain to work together towards the common goals of improved quality, increased efficiency through e-AWB and e-freight and more effective security. Combined, these measures will improve air cargo’s competitiveness in the face of stagnant demand growth and unfavorable market developments.

Air cargo is suffering from a prolonged slump that has seen falls in yields, revenues and market share. Since 2010 world trade has grown by 12% whereas air cargo demand growth has been basically flat with only a 2% increase. A divergent trend in passenger demand, with growth continuing in the historical 5-6% range, has complicated the situation. As airlines grow fleet capacity to meet rising passenger demand, capacity has been introduced into weak cargo markets, putting considerable downward pressure on yields. Cargo revenues in 2013 are expected to be $59 billion, some $8 billion below the 2011 peak.

“No business or business model survives over the long term without evolving. Air cargo is being buffeted by forces for change. These include changes in the economics of just-in-time manufacturing, longer delivery lead times, innovation by alternative modes of transport, and environmental pressures. In the face of these challenges, air cargo needs to work together as an industry to improve competitiveness and protect its value proposition,” said Tony Tyler, IATA’s Director General and CEO, speaking to the Air Freight Institute at the World Congress of the International Federation of Freight Forwarders Associations (FIATA), in Singapore.

“By working together we have made global air cargo safe, secure and reliable. So reliable, that it is often taken for granted. It is the unsung hero of the global economy—underpinning global supply chains and delivering products to markets. But if we are to return the business to growth, the industry must collectively embrace an agenda for enhanced quality, efficiency and security,” said Tyler.



About the Author

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Patrick Burnson
Executive Editor
Patrick Burnson is executive editor for Logistics Management and Supply Chain Management Review magazines and web sites. Patrick is a widely-published writer and editor who has spent most of his career covering international trade, global logistics, and supply chain management. He lives and works in San Francisco, providing readers with a Pacific Rim perspective on industry trends and forecasts. You can reach him directly at .(JavaScript must be enabled to view this email address).

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About the Author

Patrick Burnson, Executive Editor
Patrick Burnson is executive editor for Logistics Management and Supply Chain Management Review. Patrick covers international trade, global logistics, and supply chain management. He lives and works in San Francisco, providing readers with a Pacific Rim perspective on industry trends and forecasts. Contact Patrick Burnson

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